Ask most people and my guess would be that they see banking as banking. For better or worse, banks get lumped (and take their lumps) together as a collective group. On the surface, there may not be many obvious differences (other than size) between the giant bank with branches in every state and the small, community bank with three branches in Northwest Ohio. Banking products vary slightly from bank to bank, but your basic banking services can be found at each and every institution.
From my humble community banker’s perspective, the main difference lies in scope and mission. A 5,000 branch bank serves a much larger area than a community bank, must cater to the majority, and makes decisions for the company that typically stem from a bank’s corporate headquarters in a metropolitan area somewhere. A decision made for the good of the company in this situation will probably not be tailored to benefit Bluffton or Pandora, Ohio, populations 3,944 and 1,184 respectively (from city-data.com as of July, 2008). Even Findlay with a population of 36,987 may not register with a large bank the same way it does with a community bank centered in the community.
Community banking at its core is banking in and for the communities it calls home. Corporate headquarters of First National Bank of Pandora is located on Main Street in Pandora, OH. Decisions made to benefit the bank will be made with the residents of Pandora and other local communities in mind and not a large population in some other region or state. Bluffton’s other community bank has corporate headquarters in Bluffton, Ohio. Decisions made at corporate headquarters are likely to be made with area residents in mind. Community bankers in these small towns usually live and work in the area. And contrary to the practices of many larger banks, community banking decisions are made by these local residents who have a better understanding of their community than someone at corporate headquarters in New York, New York. Community bankers have the capacity and are empowered to make decisions in the communities they serve. This is a distinction that should not be overlooked or undervalued.
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